OPEC causing less fear this time

By Rhiannon Meyers | Houston Chronicle

Published
12:35 pm CDT, Thursday, June 4, 2015

Suhail Mohamed Al Mazrouei, Minister of Energy of the United Arab Emirates, UAE, speaks to journalists during a seminar of the Organization of the Petroleum Exporting Countries, OPEC, at Hofburg palace, in Vienna, Austria, Thursday, June 4, 2015. (AP Photo/Ronald Zak) less

Suhail Mohamed Al Mazrouei, Minister of Energy of the United Arab Emirates, UAE, speaks to journalists during a seminar of the Organization of the Petroleum Exporting Countries, OPEC, at Hofburg palace, in ... more

Photo: Ronald Zak

Photo: Ronald Zak

Image
1of/8

Caption

Close

Image 1 of 8

Suhail Mohamed Al Mazrouei, Minister of Energy of the United Arab Emirates, UAE, speaks to journalists during a seminar of the Organization of the Petroleum Exporting Countries, OPEC, at Hofburg palace, in Vienna, Austria, Thursday, June 4, 2015. (AP Photo/Ronald Zak) less

Suhail Mohamed Al Mazrouei, Minister of Energy of the United Arab Emirates, UAE, speaks to journalists during a seminar of the Organization of the Petroleum Exporting Countries, OPEC, at Hofburg palace, in ... more

Photo: Ronald Zak

OPEC causing less fear this time

1 / 8

Back to Gallery

The U.S. oil industry is anticipating today’s OPEC meeting with less anxiety than before the cartel’s gathering late last November, when its decision to maintain output levels sent prices plunging, cost thousands of jobs and put the brakes on Texas’ booming economy.

The 12-member Organization of the Petroleum Exporting Countries has been sending signals ahead of its meeting in Vienna that it will again leave its production targets unchanged despite a global oversupply, reinforcing last year’s move by its biggest producer, Saudi Arabia, to defend market share rather than prop up prices as it often has in the past.

“OPEC is getting what they want,” said Kevin Smith, senior vice president at Raymond James. “They’ve driven the price down, production is flat-lining and you’re seeing a demand increase. It’s a slow process, but because they chose not to cut production, you’re starting to see everything come back in balance.”

Oil supply overtook demand partly because technological advances late in the last decade unlocked oil and gas from once-inaccessible, dense U.S. shale formations. Saudi Arabia’s strategy of maintaining OPEC production has slowed the U.S. shale drilling juggernaut in a downturn that’s been especially difficult in Texas, home to some of the nation’s largest plays.

Read the rest of the article here at the Houston Chronicle. Article is paywall protected.